I also got hung up when he said it used to work on Win7 64-bit; I didn't see how that was possible, other than running it in a Windows XP VM (which I suggested, and which I have previously done successfully). So I tested it and confirmed my initial suspicions.
John, if I remember correctly I did have some 16 bit programs work in 64 bit Win 7 when I updated XP to Win 7. After a while I was having problems so I formatted the drive, installed Win 7 and then the programs would not load. There must have been something in the registry that allowed these program to run that was taken out when I did a fresh Win 7 install. I'm fairly sure about this but as I have CRS and this happened awhile ago I may be wrong.